U'S' History Chapter 22 Notes The Great Depression Begins

1
U.S. History Chapter 22 Notes The Great
Depression Begins

• An economic crisis grips the nation during the
  Great Depression. President Herbert Hoovers
  conservative response to the nations problems
  costs him many supporters.

2
Section 1The Nations Sick Economy

• As the prosperity of the 1920s ends, severe
  economic problems grip the nation.

3
Economic Troubles on the Horizon

• Problems began threatening economic prosperity by
  the end of the 1920s
• Farm debt - many farmers were forced to sell in
  the 1920's
• Consumer debt - many people were buying goods on
  credit
• More goods then buyers - prices rose faster than
  wages
• Declining Trade - 1920's U.S. raised tariffs
  other countries raised tariffs to retaliate
• Important industries struggled
• Income disparity - Consumers farmers went
  steadily deeper into debt

4
Industries in Trouble

• Key industries like railroads, textiles, steel
  barely made profit
• Replaced by other forms of transportations
• Mining, lumbering expanded during were no longer
  in high demand
• Coal especially hard-hit due to availability of
  new energy sources
• - Hydroelectricity, fuel oil, natural gas
• Boom industries - automobiles, construction,
  consumer goods weakened
• Housing starts declined
• - Affected many related industries

5
Farm Troubles

• International demand for U.S. grain declined
  after war
• - prices dropped by 40 or more
• Farmers boosted production to sell more
• - Caused prices to drop further
• Farm income declined farmers defaulted on loans
  
• Rural banks failed
• Congress attempted to pass the McNary- Haugen
  bill to help farmers
• - Price-supports - government bought surplus
  crops at guarantees prices
• - President Coolidge vetoed price-support bill

6
Consumers Problems

• 1920s - rich got richer poor got poorer
• Prices rose faster that wages
• 70 of families earned less than minimum for
  decent standard of living
• - 2500 annually
• Most couldnt afford flood of products factories
  produce
• Many people had been purchasing goods on credit
  (buy now, pay later)
• Businesses gave easy credit consumers piled up
  large debts
• Consumers had trouble paying off debt cut back
  on spending

7
The Election of 1928

• Democrat Alfred E. Smith - four times governor of
  New York
• Republican Herbert Hoover has served as secretary
  of commerce under Warren Harding Calvin
  Coolidge
• U.S. had experienced prosperity under Republicans
  in 1920s
• Hoover won an overwhelming victory

8
Dreams of Riches in the Stock Market

• Late 1920s Some economist warning of weaknesses
  in the economy
• - Most Americans ignored them
• People began investing in stock market
• - Looked like an easy way to make money
• Dow Jones Industrial Average was used as
  barometer of the markets health
• - Measure based on the stock of 30
  representative large firms trading on the New
  York Stock exchange tracks state of stock market

9
How the DJIA is Calculated

• Calculation
• To calculate the DJIA, the sum of the prices of
  all 30 stocks is divided by a divisor. The
  divisor is adjusted in case of splits, spin offs
  or similar structural changes, to ensure that
  such events do not in themselves alter the
  numerical value of the DJIA. The initial divisor
  was the number of component companies, so that
  the DJIA was at first a simple arithmetic
  average the present divisor, after many
  adjustments, is less than one (meaning the index
  is actually larger than the sum of the prices of
  the components). That is
• where p are the prices of the component stocks
  and d is the Dow Divisor.
• Events like stock splits or changes in the list
  of the companies composing the index alter the
  sum of the component prices. In these cases, in
  order to avoid discontinuity in the index, the
  Dow divisor is updated so that the quotations
  right before and after the event coincide

10
Dreams of Riches in the Stock Market

• 1920s - stock prices rose steadily Bull
  Market
• People rushed to buy stocks bonds to make a
  quick profit
• - Many engaged in speculation - buy on chance
  of a quick profit
• - Began Buying on margin - pay small percent of
  price, borrow rest

11
The Stock Market Crashes

• September 1929 stock prices peaked then fell
• Many investors lost confidence began selling
• October 24, 1929 - Market took plunge many
  panicked investors unloaded their shares

12
The Stock Market Crashes

• October 29, 1929 - Stock market crashed (Black
  Tuesday)
• - Shareholders sold frantically
• - Millions of shares had no buyers
• - People who bought on credit were left with
  huge debts
• - Others lose most of their savings

13
The Depression Comes
14
Financial Collapse

• Great Depression - economy plummeted
  unemployment skyrocketed
• - lasted from 19291940
• After crash, people panicked withdraw money
  from banks
• Banks that invested in stocks failed people lost
  their money
• 1929 to1932 - gross national product was cut
  nearly in half
• - 90,000 businesses went bankrupt
• 1933 - 25 of workers were unemployed
• Those with jobs received cuts in hours pay

15
Worldwide Shock Waves

• Great Depression limited U.S. ability to import
  European goods
• Hawley-Smoot Tariff Act set highest protective
  tariff ever in U.S.
• Other countries couldnt earn American currency
  to buy U.S. goods
• - Many countries retaliated by raising their own
  tariffs
• International trade dropped unemployment soared
  around world

16
Causes of the Great Depression

• Factors leading to Great Depression
• Declining Trade - Tariffs war debts cut down
  the foreign markets for American goods
• Farm problems - Many farmers were forced to sell
  
• Easy credit Borrowed money to invest in market
• Income disparity
• Federal government kept interest rates low
  encouraged borrowing

17
Section 2Hardship and Suffering During the
Depression

• During the Great Depression Americans do what
  they have to do to survive.

18
The Depression Devastates Peoples Lives

• People lost jobs were evicted from homes
• Had to live in parks or sewer pipes
• Shantytowns - settlements consisting of shacks,
  arose in cities

19
The Depression Devastates Peoples Lives

• People dug through garbage begged
• - Soup kitchens offered free or low-cost food
• - Bread lines - people lined up for food from
  charities public agencies
• African Americans Latinos had higher
  unemployment lower pay
• Minorities were also targets of violence
  (Lynching or deportation)

20
The Depression in Rural Areas

• Most farmers could grow food for their families
• About 400,000 farms were lost through foreclosure
• - Many became tenant farmers

21
The Dust Bowl

• Farmers in Great Plains exhausted land through
  overproduction
• 1930s - drought windstorms scattered for
  hundreds of miles
• Dust Bowl - area from North Dakota to Texas that
  was hardest hit

22
(No Transcript)
23
(No Transcript)
24
(No Transcript)
25
(No Transcript)
26
The Dust Bowl

• Many farm families migrated to Pacific Coast
  states (Route 66)
• - California towns became overcrowded
• - Many people who moved west were from Oklahoma
  (Okies)

27
Effects on the American Family

• Family was source of strength for most Americans
• Believed in traditional values and emphasized the
  importance of family unity
• Many families entertained themselves with board
  games radio
• - Monopoly was invented in 1933
• Some families broke apart under strain of making
  ends meet

28
Men in the Streets

• Many men used to working supporting families
  had difficulty coping
• Couldnt find jobs
• Manny stopped trying
• Some men even abandoned their families
• - About 300,000 hoboes wandered country on
  railroad box cars
• No federal system of direct relief - cash or food
  from government

29
Women Struggle to Survive

• Women worked hard to help their families survive
  the adversity
• Homemakers budgeted carefully, canned food,
  sewed clothes
• Women worked outside home were resented by
  unemployed men

30
Women Struggle to Survive

• Early 1930s Some cities refused to hire married
  schoolteachers
• Many women suffered in silence were ashamed to
  stand in bread lines

31
Section 3Hoover Struggles with the Depression

• President Hoovers conservative response to the
  Great Depression draws criticism from many
  Americans.

32
Hoover Tries to Reassure the Nation

• President Herbert Hoover told Americans the
  economy was sound
• Many experts believed depressions were normal
  part of business cycle
• - Believed that it was best to do nothing let
  the economy fox itself
• Hoover believed government should foster
  cooperation between competing groups

33
Hoover Tries to Reassure the Nation

• Many believed that people should succeed through
  their own efforts
• People should take care of own families not
  depend on government
• Hoover opposed any form of federal welfare or
  direct relief to the needy
• - Believed that hand-outs would weaken peoples
  self respect moral fiber
• - Said that charities local organizations
  should help the less fortunate

34
Hoover Takes Cautious Steps

• Hoover called meeting of business, banking, labor
  leaders to solve problems
• - Asked them to work to together to solve the
  problems
• Created organization to help private charities
  raise money for poor

35
Hoover Takes Cautious Steps

• Hoovers authorized the construction of the
  Boulder Dam on the Colorado River
• - later renamed Hoover Dam
• - Provided electricity, flood control, water to
  states on river basin

36
(No Transcript)
37
(No Transcript)
38
(No Transcript)
39
Democrats Win in 1930 Congressional Elections

• People began blaming Hoover Republicans for the
  economic problems
• Democrats won House of Representatives
• Republican Senate majority down to 1 vote
• People Grew frustrated with the Depression

40
Hoovervilles..
41
Democrats Win in 1930 Congressional Elections

• Farmers tried to create food shortages to raise
  prices
• Burned fields rather than sell crops at a loss
• Some declared a farm holiday
• People began calling shantytowns Hoovervilles

42
(No Transcript)
43
Hoover Takes Action

• Hoover softened his stance on no government
  intervention in the economy
• Hoover negotiates agreements among private
  entities
• Backs Federal Farm Board (organization of farm
  cooperatives)
• - buy crops, keep off market until prices rise

44
Hoover Takes Action

• Got large banks to establish National Credit
  Corporation
• - Loaned money to smaller banks to prevent
  bankruptcy
• Late 1931 - Hoover persuaded Congress to pass
  measures reform banking, provide mortgage relief,
  funnel federal money into business investment
• - Federal Home Loan Bank Act lowered mortgage
  rates

45
Hoover Takes Action

• Reconstruction Finance Corporation Authorized
  emergency funds for businesses
• - Hoover believed that the money would tickle
  down to average citizens through job growth
  higher wages
• - Critics said people couldnt wait for the
  money to trickle down
• Hoovers measures didnt improve economy before
  presidential election

46
Gassing the Bonus Army

• 1932 Incident with World War I veterans further
  damaged Hoovers image public morale
• 1924 Congress agreed to pay a bonus to WWI vets
  who had not been adequately compensated for
  wartime service
• - Bonus was to be paid in 1945 in the form of
  cash a life insurance policy

47
Gassing the Bonus Army

• Bonus Army WWI veterans went to D.C. in 1932 to
  support Patman Bill
• - called for immediate payment of bonus to WWI
  vets (500 per soldier)

48
Gassing the Bonus Army

• Hoover opposed bill
• Believed they were communists
• He respected their right to protest (Provided
  food supplies for shantytown)
• June 17, 1932 - Senate voted down Patman Bill
• Most veterans left Washington
• About 2,000 stayed to speak to Hoover

49
Gassing the Bonus Army

• Hoover feared violence called on U.S. Army to
  disband Bonus Army
• - Led by General Douglass Macarthur Major
  Dwight Eisenhower

50
Gassing the Bonus Army

• Infantry tear gassed over 1,000 people, including
  children
• Many people were injured (11 month old baby
  died)
• Public was stunned outraged by governments
  actions

51
U.S. History Chapter 23 NotesThe New Deal

• President Franklin D. Roosevelts New Deal
  programs stimulate the economy and the arts. The
  New Deal leaves a lasting, yet controversial mark
  on American government.

52
Section 1A New Deal Fights the Depression

• After becoming president, Franklin Delano
  Roosevelt uses government programs to combat the
  Depression.

53
Election of 1932

• Democrats nominated NY governor Franklin Delano
  Roosevelt
• - reform-minded
• projected friendliness confidence
• Democrats overwhelmingly won presidency, Senate,
  House

54
(No Transcript)
55
Election of 1932

• Roosevelt had to wait 4 months to take over
• 20th Amendment wasnt rarified until 1933 (Move
  inauguration to January)
• FDR worked with advisors known as Brain
  Trust, to formulate policies to alleviate
  problems
• New Deal FDRs program to alleviate the
  problems of the Great Depression focused on 3 Rs
• Relief for needy
• Economic recovery
• Financial reform

56
The Hundred Days

• March 9 to June 16, 1933 - FDR took office
  launched Hundred Days
• Congress passed over 15 major New Deal laws that
  expanded the federal governments role in the
  nations economy

57
Bank Holiday

• March 5, 1933 one day after taking office FDR
  declared a bank holiday closed all banks to
  prevent further withdrawals
• Emergency Banking Relief Act - Permitted
  Treasury Dept. to inspect banks
• Sound banks were allowed to reopen
• Banks that needed help received loans
• Insolvent ones remained closed (unable to pay
  bills)
• Bank Holiday revived public confidence in banks
• - Believed that the banks remained open were in
  good shape

58
An Important Fireside Chat

• FDR gave fireside chats - radio talks explaining
  New Deal measures
• March 12, 1933 FDR gave 1st fireside chat the
  day before the banks reopened after holiday
• - Discussed need for public support of
  government, banks

59
Regulating Banking and Finance

• Congress took another step to reorganize the
  banking system
• Glass-Steagall Act - Established Federal Deposit
  Insurance Corporation (FDIC)
• insured individual bank accounts up to 5000
• Regulates banking practices ( forced them to act
  cautiously with money)

60
Regulating Banking and Finance

• Federal Securities Act Required companies must
  give all information on stocks
• Securities and Exchange Commission (SEC) created
  to regulate stock market
• FDR got law allowing production of some alcoholic
  beverages
• 21st Amendment repealed prohibition by end of
  1933

61
Helping the American People

• Roosevelt administration implemented programs
  aimed at helping farmers other workers to
  stimulate economy
• Agricultural Adjustment Act (AAA) raised food
  prices by lowering supply
• - Government paid farmers not to plant crops

62
Helping the American People

• Tennessee Valley Authority - Created jobs
  renovating building dams
• - Also provided flood control hydroelectric
  power to region

63
(No Transcript)
64
Helping the American People

• Civilian Conservation Corps (CCC) - public works
  jobs for young men 18 to 25
• - Built road, planted trees helped in soils
  erosion flood control projects
• - Men sent 25 out of 30 home to family each
  month

65
(No Transcript)
66
(No Transcript)
67
(No Transcript)
68
(No Transcript)
69
(No Transcript)
70
NIRA

• National Industrial Recovery Act - established
  codes of fair practice for industries
• Created National Recovery Administration (NRA)
• NRA sets standards, prices, limits production

71
Food, Clothing, and Shelter

• Federal Emergency Relief Administration -direct
  relief to needy

72
The New Deal Comes Under Attack

• Deficit spending - spending more money than
  government takes in
• - funded New Deal
• Opposition rose when the New Deal didnt stop
  the Depression
• Liberals didnt think New Deal did enough to help
  poor, fix economy
• Conservatives believed Roosevelt used the New
  Deal to control business socialize economy

73
The Supreme Court Reacts

• Supreme Court struck down NIRA AAA as
  unconstitutional
• FDR proposed Court-packing bill
• Change the Supreme Court from 9 to 15 justices
• Would enable FDR to appoint 6 new justices
• Congress press protested
• Starting in 1937 - justices retire FDR
  appointed seven new ones

74
Huey Long Attacked the New Deal

• Governor of Louisiana "King Fish"
• Built schools and hospitals
• Ruled Louisiana like a dictator
• Wanted to be president
• Decided to challenge FDR
• Offered new deal "Share our wealth"
• - Called for every family to get yearly income
  money to buy food and housing
• - Taxed the rich heavily
• Made enemies in his attempt to become president
• - Shot and killed in 1935

75
Section 2The Second New Deal Takes Hold

• The Second New Deal includes new programs to
  extend federal aid and stimulate the nations
  economy.

76
2nd New Deal
77
The Second Hundred Days

• By 1935, economic recovery not as great as FDR
  had expected
• Unemployment remained high
• Work programs productions still behind 1920s
  levels
• FDR launched second phase
• Provided more relief for farmers, workers

78
The Second Hundred Days

• First Lady Eleanor Roosevelt a social reformer
  prodded president
• She traveled the country observing the social
  conditions reminding FDR about the suffering
• She also pushed for him to appoint women to
  government positions

79
Helping Farmers

• 1936 - Soil Conservation and Domestic Allotment
  Act replaced AAA
• - Rewarded farmers for practicing soil
  conservation
• New Agricultural Adjustment Act avoided
  unconstitutional provision
• Resettlement Administration gave loans to small
  farmers to buy land
• Farm Security Administration - loaned to tenant
  farmers to buy land
• - FSA hires photographers to shoot pictures of
  rural towns farms

80
(No Transcript)
81
Roosevelt Extends Relief

• 2nd New Deal established a series of programs to
  help youths, professionals other workers
• Works Progress Administration (WPA) created many
  jobs for unskilled workers
• - WPA workers built airports, roads, public
  buildings
• - Women workers sewed clothes for the needy
• - WPA employed professional writers, artists,
  performers
• - Gave aid to students in exchange for part-time
  work

82
(No Transcript)
83
(No Transcript)
84
(No Transcript)
85
(No Transcript)
86
Roosevelt Extends Relief

• National Youth Administration (NYA) - provided
  education, jobs, counseling recreation to young
  people

87
Improving Labor and Other Reforms

• Wagner Act - replaced NIRA
• - Protected right to join unions collective
  bargaining
• - Prohibited unfair labor practices (threatening
  workers or firing union members)
• - Established National Labor Relations Board
  that heard testimony about labor practices
• - Held elections to determine if workers wanted
  unions
• 1938 - Fair Labor Standards Act sets maximum
  hours minimum wage
• - 44 hrs per week decreasing to 40 in two years
  25 cents per hr.

88
Social Security Act

• 1935 - Social Security Act created Social
  Security system
• Provided insurance for retirees 65 or older
• Unemployment compensation
• Aid to disabled families with children

89
Expanding and Regulating Utilities

• Rural Electrification Administration (REA)
  brought electricity to farms
• - Rose from 12.6 in 1935 to 48 in 1945 to 90
  in 1949
• Public Utility Holding Company Act aims to stop
  financial corruption

90
WPA
91
Section 3The New Deal Affects Many Groups

• New Deal policies and actions affect various
  social and ethnic groups.

92
The New Deal Brings New Opportunities for Women

• Several women were named to important government
  positions
• Frances Perkins became first female cabinet
  member (Secretary of Labor)
• - FDR also appointed 2 women as diplomats 1 as
  a federal judge
• Women still faced discrimination in workplace
  from male workers
• National Recovery Administration (NRA) set some
  lower minimum wages for women
• Federal work programs hired far fewer women than
  men

93
African-American Activism

• FDR appointed more than 100 African Americans to
  government
• Educator Mary McLeod Bethune headed Division of
  Negro Affairs of NYA
• Helped organize Black Cabinet
• Group of influential African-American who advised
  FDR on racial issues

94
Section 4Culture in the 1930s

• Motion pictures, radio, art, and literature
  blossom during the New Deal.

95
The Lure of Motion Pictures and Radio

• About 65 of population went to movies once a
  week
• - Movies were still affordable
• - People watched them to escape real life
• - Grapes of Wrath
• - Gone With the Wind
• - The Wizard of OZ

96
The Arts in Depression America

• Federal Art Project paid artists to make art,
  teach in schools
• Aim to promote art appreciation positive image
  of America
• Murals typically portrayed dignity of ordinary
  people at work
• Federal Theater Project hired actors artists
• Singer, songwriter Woody Guthrie sung songs about
  the of plight of poor

97
Diverse Writers Depict American Life

• Federal Writers Project supported many who
  become major writers
• Richard Wright - African-American author who
  wrote Native Son
• John Steinbeck wrote The Grapes of Wrath about
  Dust Bowl migrants

98
Section 5The Impact of the New Deal

• The New Deal affects American society not only in
  the 1930s but also in the decades that follow.

99
The New Deal Ends

• By 1937, economic improvement convinced many that
  Depression was ending
• Congress wanted to cut back programs
• By 1939 - New Deal was over

100
Supporters and Critics of the New Deal

• Supporters Believed the New Deal helped country
  recover from economic difficulties
• Conservatives though FDR made federal government
  too large
• - stifled free enterprise individual
  initiative
• Liberals thought New Deal didnt do enough to
  socialize economy end inequalities

101
Effects of the New Deal

• Expanded power of federal government president
• Social Security Act - Federal government takes
  responsibility for citizens welfare
• - Provided aid for aged, disabled needy
• FDIC still protects individual investors in case
  of bank failure
• SEC still monitors stock market, enforces laws on
  stock, bond sales
• New Deal laws set standards for wages hours
• - banned child labor
• - Permitted unions
• Civilian Conservation Corps (CCC ) - planted
  trees, built hiking trails, fire lookout towers

102
Effects of the New Deal

• Soil Conservation Service taught farmers how to
  preserve soil
• - Contour plowing, terraces, crop rotation
• 1934 - Taylor Grazing Act reduced grazing on
  public lands
• - Grazing had contributed to erosion that caused
  the dust bowl
• Tennessee Valley Authority (TVA) created
  electricity, prevented floods
• New Deal reduced suffering gave people hope
• - Provided jobs, food money
• New Deal didn't end depression WWII did

103
End of the Depression